Ex-Jefferies MD loses bid to drop fraud charges

Gavel

Ex-Jefferies managing director Jesse Litvak lost a court bid to throw out charges that he defrauded customers of more than $2m on trades of residential mortgage-backed securities.

Bloomberg reports that Litvak, who has pleaded not guilty, was indicted in January on charges of securities fraud, fraud connected to the Troubled Asset Relief Program and making false statements to the federal government.

Alleged victims include investment funds, among them six established by the U.S. Treasury Department in 2009 as part of its response to the financial crisis.

U.S. District Judge Janet C. Hall in New Haven, Connecticut, denied a motion to dismiss the indictment in a ruling dated yesterday, rejecting Litvak’s argument that the Public-Private Investment Program created to distribute TARP funds was a private vehicle managed by a private contractor and therefore falls outside of the government’s jurisdiction.

The Public-Private Investment Funds that are the alleged victims of Litvak’s fraud were 'government-created entities using mostly taxpayer money to achieve a government program’s purposes'. Hall wrote in her ruling.

To access the complete Bloomberg article hit the link below

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